Virginia’s electric distribution cooperatives are local, community-owned and community-governed electric utilities.
Virginia’s electric cooperatives purchase nearly all of their generation supply, with relatively minimal amounts of directly-owned generation.
ODEC, Virginia’s generation and transmission cooperative (G&T) is the primary power supplier for nine Virginia cooperatives. ODEC is owned by 11 electric distribution cooperatives in Virginia, Maryland, and Delaware. It exists to supply wholesale power to its member-cooperatives.
The not-for-profit business model of Virginia’s electric cooperatives means that profit is not the driving motive in providing electric service.
Electric service is provided at cost. Any revenues in excess of actual expenses are ultimately returned to member-consumers.
As cooperatives are owned and controlled by the communities and consumers they serve, the values and priorities of our members and their communities are the values and priorities of the cooperative.
Virginia’s electric cooperatives have led Virginia utilities in giving their communities access to renewable energy. BARC Electric Cooperative established Virginia’s first community solar program and has partnered with Bath County Public Schools to generate 50% of the schools’ electricity needs through renewable generation. Central Virginia Electric Cooperative recently brought online 10 MW of community solar – the third-largest cooperative community solar project in the country. Additionally, A&N, Mecklenburg, Northern Neck, and Rappahannock Electric Cooperatives have programs offering subscription-based community solar programs through ODEC’s larger solar portfolio. More cooperatives will join them in offering community solar shortly.
Virginia's cooperatives have some of the highest per-capita concentrations of net metering installations.
Virginia’s electric cooperatives need to ensure that there is an adequate recovery of costs to support the operations of the cooperative and that such costs should be equitably recovered from each member. While the cost of generation supply directly aligns (rises and falls) with the amount of electricity consumed, the same is not true of the costs of delivering electricity. Delivery costs are fixed and do not vary based on consumption. Fixed costs include administration, maintenance and equipment and general operating expenses incurred to ensure the local grid is available to bring power to customers – or move power from net-metering customers.
Some “fixed” costs vary from consumer-to-consumer based on each consumer’s demand. Demand is the instantaneous use of electricity, while energy represents the sum of electricity used over time. Demand drives costs such as the size of the transformer and conductor. While on-site solar generation will reduce energy use, it may not reduce demand. These local delivery costs need to be recovered from all users of the electric system now and into the future, whether a particular user has generation capabilities or not.
When developing solar policy that allows members who want increased access to solar or other renewable power to have it, we must ensure that these necessary costs are fully recovered from “participating” consumers connected to the delivery system and not shifted on to other consumers who do not have the benefit of on-site generation. Otherwise, there will be a cross-subsidization among similarly-situated customers (all who are connected to the grid and who all receive distribution delivery services from their utility).
The current net metering construct in Virginia fails to recognize that electric rates in Virginia are “unbundled” to separate delivery costs and generation costs; does not allow a cooperative to fully recover its basic costs from net metering customers; nor does it allow a cooperative to fully compensate a net metering customer-generator for the full value that a renewable fuel generator may provide to the electric grid.
Virginia’s electric cooperatives would like to see a system whereby not-for-profit cooperatives could fully recover the cost-of-service associated with service to each member (especially distribution service), while also being able to fully compensate net metering members for the value they provide the cooperative and the grid during peak times (including supply components).
Virginia’s electric cooperatives believe that if rate reform could be quickly and economically achieved, then other issues such as caps, system size limitations, restrictions on third-party PPAs, and third-party community solar could then be addressed without objection.
Electric cooperatives have been leaders in energy efficiency, demand response, and conservation programs since implementing thermal storage programs in the 70s and demand response compressor appliance and device cycling programs in the 80s and 90s. We also have a variety of lighting, air filter, and other similar consumer-based programs, in addition to educational programs, in place. As we have no profit motive in selling power, we want to help our members reduce consumption through increased efficiency.
We do have concerns with any programs that mandate cooperatives pay for programs that do not benefit all of our members. We are generally opposed to mandates; history has shown us that we can usually achieve similar or better results without them. Additionally, unique characteristics of cooperatives often mean that mandates affect us differently from investor-owned utilities.
We also wish to point out the national trend towards “beneficial electrification” – electrifying traditionally heavy-carbon-emitting operations like vehicles, thereby reducing carbon and other greenhouse gas emissions. We believe that combined with a long-term energy policy on clean, zero-carbon generation, a beneficial electrification strategy could significantly blunt the impacts of climate change.
We need to be careful when drafting EE policy to incent and encourage more efficient energy production; while not calling for an overall reduction in usage as this contradicts the move towards cleaner, “beneficial” electricity. Some measures, such as lost revenue, do not make sense for electric cooperatives.
Virginia’s electric cooperatives support investment in electric vehicles and charging infrastructure. This goes hand-in-hand with the policy of beneficial electrification to reduce carbon emissions.
Investing in charging stations also yields a return in tourism dollars and economic development areas as EV owners have a greater network of charging stations. The cooperatives are committed to working with the Commonwealth and EVgo as they construct a statewide charging station network.